"The crop growing period of market action is sometimes referred to as the ‘silly season’,” says Neil Blue, provincial crops market analyst with the Alberta government. “Dryness in both the Canadian Prairies and U.S. corn/soybean belt plus intensified Russian attacks on Ukraine grain export structures have caused a crop market price rally. Adding in the influences of the speculative trade results in an extremely volatile market. What can a producer do in this situation?"
First, Blue says producers should review their cash flow situation at least 2 or 3 months forward. What farm and personal expenses and what loans will require payments? What amounts from sources of cash inflow, be it product sales, other income, or loans will be available?
"The federal Advance Payments Program (APP) is a loan source to consider for cash flow needs,” says Blue. “Using farm commodities as security, the APP can potentially provide up to $1 million as an advance, with the first $350,000 of the advance interest free during this year. With a current chartered bank prime interest rate of 7.2%, the interest savings of accessing the APP advance can be significant."
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